55 / 72
Better Farming
November 2016
FarmNews First >
BetterFarming.com55
©2016 CLAAS of America Inc. Subject to credit approval through CLAAS Financial Services. See participating dealer for details and great financing rates. Product and specifications subject to change without notice. claas.com All-around powerful. Get first class forage harvesting with the complete line of mowers, rakes, tedders and balers from CLAAS. Reliable technology, seamless operation and robust machinery makes for outstanding performance. Ask your dealer about the complete line of CLAAS balers and hay tools. Special financing available through CLAAS Financial Services October 1-December 31, 2016. Connect Equipment Chepstow 519-366-2325 DeBoer’s Farm Equipment Elora 519-846-5388 Elliott’s Farm Equipment Pembroke 613-638-5372 G.J.’s Farm Equipment Burgessville 519-424-9374 Ken Brownlee & Sons Equipment Earlton 705-563-2212 Reis Equipment Centres Carp 613-836-3033 Winchester 613-774-2273 St. Isidore 613-527-1501 Sunova Implement Lakeside 519-349-2075THE
HILL
National farmdebt levels
Statistics Canada has released data on the 2015 farm debt levels and the Canada West Foundation is
raising concerns about the implications of these figures.
by BARRY WILSON
E
ven for veteran agriculture
watchers, this year’s Statistics
Canada tally of 2015 farm debt
levels was (pick your cliché) eye-pop-
ping, jaw-dropping or just plain
amazing.
After 23 years of annual debt
increases since 1993 that had more
than tripled national farm debt levels
from $23 billion to $84.5 billion in
2014, Canadian farmers piled on
another $7.3 billion in debt in 2015 to
reach $91.8 billion.
It was an 8.6 per cent increase in
the level of debt, the highest one-year
increase in history.
A few years ago when debt was
billions of dollars lower, George
Brinkman, distinguished University
of Guelph professor and agricultural
economist (emeritus), called it a
“ticking time bomb” because:
■
An end to a long run of record-
low interest rates would make the
debt much more difficult and
expensive to service;
■
A decline in commodity prices
or several years of climate-related
crop failure would push many
indebted farmers to the brink,
since debt servicing comes from
cash flow rather than asset value;
and
■
American producers tend
to have lower average debt levels
and therefore less exposure and a
lower cost of production, so they
typically have a competitive
advantage in markets where
Canadian and U.S. agricultural
products compete.
Still, rising farm debt levels have
not been the subject of major focus in
farm sector politics or mainstream
Sarah Pittman